December 11, 2023 - Newswires

Corn and soybean faced modest cuts following Dec WASDE report ...

Wheat stumbled lower ...

Good morning, Farmer Family ...

US farm markets faced moderate cuts, on Friday.

Corn prices dropped 0.51%.

Soybeans fell 0.59%.

The rest of the soy complex also spilled into the red, as soymeal eased 0.52%,

while soyoil stumbled 1.82%.

Wheat prices faced variable losses, as Chicago SRW lost 1.63%, Kansas City HRW fell 0.97%, Minneapolis spring wheat lost 1.05%.

• Corn fell after the USDA left its forecasts for corn production in Brazil and Argentina unchanged.
• Soybean retreated after the USDA updated estimate of Brazil's soybean harvest, toward the high end of trade expectations.
• Wheat prices declined on profit-taking after hitting a one-week high.
• For corn, the USDA showed a 635k MT increase for the U.S. corn export program. That came out of carryout, dropping it to 54.13 MMT. Prices spiked on the first couple ticks after that news, but proceeded to “buy the rumor and sell the fact”.
• USDA did not adjust the cash average price, still at $4.85.
• Global corn adjustments saw a 1.3 MMT increase to corn production to 1.222 billion MT. Both Brazil and Argentina were left UNCH.
• For soybean, USDA reported no changes for the US soy balance sheets, save for the cash price for the products. Soybean carryout stayed at 6.67 MMT, while the average of pre report estimates was to see a slight 82k MT trim.
• USDA left the average soybean cash price at $12.90 for soybeans, but had meal$10/ton higher at $390 and soy oil 4 cents weaker at 57 c/lb.
• On the world stage, USDA trimmed soy production by 1.5 MMT, mainly via a 2 MMT cut to Brazil.
• The USDA pegged Brazilian soy production at 161 million metric tons.
• Chinese import demand was upped by 200k MT to 102 MMT.
• For wheat, USDA’s December balance sheet for the US wheat situation increased the SRW exports by 816k MT to 4.76 MMT, while also trimming the white wheat by 136k MT. On net that set the total wheat exports 680k MT higher to 19.73 MMT. That cut projected carryout to 17.94 MMT.
• The USDA raised the projected cash average price 10 cents per bushel for the year, due to the stronger export demand. The cash average price for wheat from the WASDE report, indeed, was a dime higher at $7.30.
• The global wheat picture saw a 1 MMT boost for Australian wheat production and a 950k MT boost for Canada. The global carryout was then 500k MT tighter to 258.2 MMT.
• Separately, the USDA confirmed private sales of 136,000 metric tons of U.S. soybeans and 110,000 metric tons of U.S. soft red winter wheat to China for shipment in the 2023/24 marketing year.
• The USDA also reported sales of 165,000 metric tons of U.S. corn to unknown destinations.
• The U.S. government has reported sales of 1.12 million metric tons of U.S. wheat to China last week, the biggest one-week total to the Asian country since July 2014.
• On Thursday, USDA’s weekly Export Sales report had showed 1.289 MMT of corn was booked during the week that ended 11/30. Corn commitments for the season were up to 25.747 MMT.
• For soybean, data confirmed 1.518 MMT of soybeans were sold during the week that ended 11/30. Total soybean commitments were up to 1.19 billion bushel – 16% behind last year’s pace.
• FAS reported the week’s soymeal sales as 110k MT, a 70% increase for the week.
• Bean oil business was a net 1,634 MT of cancelations for the week.
• For wheat the report showed 356,412 MT of wheat was booked during the week that ended 11/30. Wheat commitments trail last year’s pace by 4.4% with 13 MMT on the books.

• Corn basis bids were steady to firm after trending 3 to 5 cents higher across three Midwestern locations.
• Soybean basis were steady to firm after rising 3 to 9 cents higher across four Midwestern locations.
• For wheat, basis levels remained down across most wheat classes during the week as U.S. wheat futures saw a spike from the prior week’s multiyear lows. Slow farmer sales continue to influence basis and, notwithstanding recent confirmed sales to China, other demand remains light. Gulf HRS and SRW basis decreased, while HRW saw a slight increase. In the PNW, both HRS and HRW basis decreased. SW price rose slightly, reflecting the week’s increase in CBOT SRW futures.
• Commodity funds were net sellers in CBOT wheat, corn and soybean contracts

For the week ...

• Corn managed to eke out just a 0.16% gain on the up and down week.
• Soybeans slipped lower on the week, as Jan was down 1.58%.
• The products piled on the pressure, with January meal another 1.94% lower, and bean oil 2.43% in the red.
• The wheat market was on a tear, at least in the winter wheat exchanges.
• Minneapolis spring wheat was down just 0.11% from the prior Friday.
• Chicago SRW rallied another 4.81% over the course of the week.
• Kansas City HRW were up 2.2%.

After the sessions close, the CFTC report showed large speculators trimmed their net short position in Chicago Board of Trade corn futures in the week to Dec. 5.

The report also showed that noncommercial traders, a category that includes hedge funds, trimmed their net short position in CBOT wheat and cut their net long position in soybeans.

This morning, Chicago wheat prices slipped further from last week’s four-month high as speculators held onto bearish positions despite the strongest run of US wheat sales to China in years. Soybeans regained ground after a higher than expected U.S. government estimate of Brazilian production eased supply concerns last week. Corn prices also rose.

• The week begins per normal.
• The weekly Export Inspections report from USDA in the afternoon.
• The US government will be out with CPI data on Tuesday, with PPI data released on Wednesday.
• The Fed will have their 2 day meeting both of those days, with an interest rate announcement on Wednesday expected to see rates unchanged.
• Weekly EIA data covering production and stocks for ethanol will be out on Wednesday.
• Export Sales data will be published on Thursday.
• NOPA will be out with their monthly crush data on Friday.

Canada

Wheat prices across the Canadian Prairies were mixed during the week ended Dec. 1, with Canadian Western Red Spring Wheat and Canada Prairie Red Spring Wheat grabbing variable gains, while Canadian Western Amber Durum incurred some losses.

Average CWRS (13.5%) prices rose C$0.39 to C$1.08 per tonne, ranging from about C$322.38 per tonne in Northeastern Saskatchewan to C$346.51 per tonne in Southern Alberta.

Average CPRS (11.5%) wheat were firmer C$1.45 to C$6.11 per tonne. Bids ranged from C$277.53 per tonne in southeastern Saskatchewan to C$303.07 per tonne in Southern Alberta.

Average CWAD prices dropped, falling between C$4.09 to C$5.79 per tonne. Bids ranged from C$450.59 per tonne in Northeastern Saskatchewan to C$458.98 per tonne in Southern Alberta.

Meantime, per latest latest data from the Canadian Grain Commission ...

Common wheat deliveries into the handling system for the week ending Dec 03, were at 474k mt, and durum at 107,2k mt.

Canadian wheat exports for shipping week 18 came in at 641,5k mt, for a total of 7542,3k mt YTD.

Durum wheat exports were at 118k mt, for a total of 1.043,7k mt YTD.

Commercial stocks stood at 2.729,6k mt for common wheat, and at 484,4k mt for durum.

South America

Brazil

Brazilian crop agency Conab on Thursday reduced the country's wheat output estimate by around 15% from a previous forecast, citing excessive rainfall in southern Brazil as a factor spoiling the crop as the season draws to a close.

• Brazilian wheat production is now estimated at 8.14 million tons for 2023, the second largest volume in the country's history.
• According to Conab, lower supplies, a sudden rise in wheat exports from Brazil in recent years, and a drop in imports from January to October 2023 will take Brazil's inventories to the lowest level in about two decades.
• A dearth of supplies has also caused prices paid to growers to rise almost 30% in the past 30 days, Conab said.
• With the fall in 2023 production, Conab believes Brazil will have to increase wheat imports by 600,000 tons in relation to a previous forecast, demanding a total of six million tons in the 2023/24 cycle (August/July).
• Brazil is also likely to export 2 million tons of wheat in that period, 600,000 tons less than Conab had predicted last month.
• Conab said Brazil's wheat ending stocks on July 31, 2024 are expected to reach the lowest levels in more than two decades, with inventories just over 240,000 tons, Conab data showed.
• Conab also has cut its forecast for Brazil's 2023/24 soybean production, but still predicts the South American nation will produce a record crop of 160.177 million metric tons.
• Soybean exports were lowered by 3.0Mt, to 100.0Mt.
• It also cut its Brazil corn production forecast by around half a million tons to 118.528 million tons, reflecting a marginal downgrading of expectations for acreage and yields for the primary (full-season) crop.

Argentina

Argentina’s crop continued to improve.

• The Buenos Aires Grain Exchange reported for the week ending 6 Dec, the 2023-24 wheat harvest was 48pc complete, with average productivity estimated at 2.4t/ha.
• Soybean sowing was 51.7pc complete, with good establishment noted for early-planted crops, except in northern parts of Entre Rios province.
• Amid favourable conditions, maize plantings estimated to be 40pc complete. However, overly wet conditions hampered fieldwork in Entre Ríos and southern Buenos Aires.
• Sorghum sowing was 36pc complete, with fields in generally good condition.
• Crop conditions saw corn rated at 36% as gd/ex, while soybeans at 36% gd/ex.

Meantime, Argentina is poised to more than double its shipments of wheat to Brazil.

• Shipments are likely to average 450,000 metric tons per month in 2024, according to Brazilian trader Serra Morena SA.
• That would push total annual trade to exceed 5 million tons and put it near historical highs.
• The outlook compares with about 188,000 tons a month so far this year and annual shipments of roughly 2 million, trade data through October show.
• Meantime, according to the weekly report of the Ministry of Agriculture, Livestock and Fisheries, 37% of the wheat area has already been harvested.
• According to the weekly report of the Ministry of Agriculture, Livestock and Fisheries, 37% of the area has already been harvested.
• The producing areas of the north of the country have already completed.
• Santa Fe was at 74% complete, Entre Ríos and Córdoba followed, with 63% and 54%, respectively. For its part, there is still no progress in the province of Buenos Aires.
• As for prices, although the nominal values that were paid in pesos for wheat have shown a strong upward trend until reaching AR$ 135,000 per ton last the week, in dollars terms they fell from US$ 250/t in mid-October to US$ 175/t at the end of last week.

Europe

European wheat prices edged lower on Friday.

• The contract reached its highest level since mid-November on Wednesday at 234.75 euros before easing back.
• In spite the weakness in the euro, export hopes have been tempered by a lack of new French wheat sales to China and the absence of EU sales in two Egyptian tenders.
• In France, a large wheat export programme for China is getting under way, with five vessels now scheduled to load according to LSEG data, but sparse recent demand was causing concern.
• If China doesn’t come back to buy more, the 2023/24 non-EU export forecast of around 10 million tons by farm office FranceAgriMer, won’t reach.
• Meantime, wheat sowing in France continued to lag the average pace of recent years after a rain-disrupted campaign, FranceAgriMer data showed on Friday.
• French farmers had sown 89% of the expected soft wheat area for next year's harvest by Dec. 4.
• Soggy conditions have also affected the state of emerged crops, as FranceAgriMer's rating of soft wheat crops dropped again, with 77% rated good or excellent by Dec. 4.
• Winter barley sowing was 94% complete by Monday. The good/excellent rating for winter barley crops declined to 81%, data showed.
• Durum wheat was showing the biggest lag in sowing progress, with 54% of the expected area drilled.
• For spring barley, sowing progress had reached 10%.
• FranceAgriMer also reported that as at 4 Dec, 2023-24 maize harvest was 99pc complete.
• Past week's crop report was FranceAgriMer's last of 2023, with the publications to resume in early February.
• Traders are watching for Tuesday’s first grain planting estimates from the French farm ministry for a indication of any area losses for winter crops and a potential shift to spring varieties.

In other news, Romania's objective to boost the monthly transit capacity for Ukrainian grain through its Black Sea port of Constanta to four million metric tons is edging closer as infrastructure projects advance, the transport minister said on Thursday.

• Transit through Romania was a record 3 million tons in October alone, minister Sorin Grindeanu said.
• During January-October, Ukraine shipped 11.7 million tons of grain through Constanta, the port authority said.

Ukraine

Ukraine’s farm ministry on Friday raised its 2023 grain harvest forecast to 59.7 million metric tons, saying the country had achieved a record grain yield.

• The total grain and oilseed harvest is expected to reach 81.3 million tons, the ministry said in a statement, compared to an October forecast of 79.1 million tons.
• According to updated estimates, the wheat harvest is expected at 22.2 million tons, barley at 5.8 million and corn at 30.1 million tons.
• The 2023 forecast for the sunflower seed harvest remained at 13 million tons and for soybeans at 4.6 million tons.
• Rapeseed harvesting has been completed at more than 4 million tons.
• On this wake SovEcon raised its 2023 Ukrainian corn crop estimate by 900,000 MT to 29.6 MMT, which would be up 3.4 MMT from last year.
• It left Ukraine’s 2023 wheat crop peg at 20.7 MMT, which would be unchanged from last year.
• SovEcon raised its 2023-24 wheat export forecast by 200,000 MT to 13.2 MMT and its corn export outlook by 600,000 MT to 22.6 MMT.
• SovEcon increased its 2024 Ukrainian wheat crop forecast by 400,000 MT to 20.1 MMT, as recent rains have improved conditions and winter wheat plantings are expected to rise by 100,000 hectares from last year.
• Meantime, according to the State Customs Service, in 2023/24 MY, as of December 8, Ukraine exported 13.92 mln tonnes of grains and pulses, of which 824.000 tonnes were shipped in the current month.
• Notably, wheat exports were at 6.103 mln tonnes (in December – 194 thsd tonnes); barley exports at 897 thsd tonnes; corn exports at 6.785 mln tonnes.
• The total export of Ukrainian flour as of December 8 is estimated at 51.8 thsd tonnes.
• Wheat flour export reached 49.5 thsd tonnes.

China

China's grain output rose 1.3 percent year on year to a record high of 695.41 million tonnes in 2023, data from the National Bureau of Statistics (NBS) showed.

• According to the NBS, the country's corn output increased 4.2 percent from 2022, while rice and wheat production decreased 0.9 percent and 0.8 percent, respectively.
• To encourage farmers to grow grain, the central government increased the minimum purchase price of wheat and rice, and improved grain subsidy policies for corn and soybean farmers in 2023.
• As a result of the combined efforts, 119 million hectares of grain crops were sown in the country in 2023, a 0.5 percent increase over the previous year.
• Notably, according to China’s Ag Outlook Committee corn production in 2023/24 was seen at 288.23 MMT.
• According to the Chinese statistics department, China produced a record corn crop of 288.84 million metric tons in 2023.
• China’s Ag Outlook Committee left country’s corn import forecast unchanged for 22/23 at 18.72 MMT with 23/24 at 17.5 MMT also unchanged.
• Soybean imports for 22/23 were lowered to 98.7 MMT down from 99.84 MMT.
• Forecast for 23/24 soybean production was seen unchanged at 97.25MMT.
• Crush volume this month for 22/23 was at 95.93 MMT.
• Soybean consumption for 23/24 was unchanged at 116.92MMt this month.

Southeast Asia

Malaysia

Malaysian palm oil prices closed up on Friday, snapping a five-session losing streak.

• However, the benchmark booked a 3.43% weekly loss, their lowest since Oct. 20.
• The Malaysian Palm Oil Board data are scheduled to be published on Dec. 12.
• Indonesia will continue 35% biodiesel mandatory blending in 2024 and hasallocated 13.41 million kilolitres of biodiesel for next year, slightly higher than the 13.15 million kilolitres allotted for 2023.

This morning, Malaysian palm oil prices opened marginally higher, extending gains from the previous session, as the market tracked strength in Chicago soyoil oil.

India

India has lowered the stock limit of wheat to increase the grain's availability, the food ministry's most senior civil servant said on Friday.

• The country has revised wheat stock limit to 1000 metric tons for traders and wholesalers from 2000 metric tonnes, its food secretary said in a statement.
• Indian authorities are worried about volatility in food prices ahead of general elections due by May.
• So far in 2023, wheat prices in India have leapt more than 20% in the past few months, despite the ban.
• The Reserve Bank of India held its rates for the fifth consecutive meeting on Friday, citing an uncertain outlook for inflation on the back of food price rises remaining above 6%.
• According to the secretary at the Ministry of Consumer Affairs, Food and Public Distribution, the government is prepared to release an additional 2.5 million metric tons of wheat in the market if required to rein in prices.
• India's wheat inventories at state warehouses have dropped to 19 million metric tons, the lowest in seven years, two government sources said on Friday.
• The government can still offload more wheat in the market if there's a requirement, as it has adequate stocks until the next crops arrive in the market.
• And that will pull stocks below 6 million tons when the new marketing year starts on April 1, against the norm of a buffer of 7.46 million tons.

Australia

Major eastern Australian bulk handler GrainCorp received 1.37 million tonnes into its network in the week to Dec 10, to lift its total intake for the current harvest to 6.47Mt, it said in its latest Harvest Update.

• The weekly total includes 999,100t in Victoria, which includes the state’s biggest day of receivals at 230,000t in the harvest to date.
• Rainfall totals for the week ending 10 December were heaviest in SA where 25-100mm was received, Vic totals were lower with 10-25mm received across southern zones and southern NSW mostly receiving less than 10mm except for the southeast where pockets received 15-25mm.
• Local markets were a touch softer to finish the week, although ASX Jan 24 wheat was close to unchanged.
• With the rainfall event through SA/Vic/SNSW slowing harvest pace, there is still plenty of crop yet to be harvested and growers will be anxious to get going again.
• Wheat quality appears to have held up surprisingly well despite rain to date but that might not be the case with ongoing rainfall events.
• Meantime, Australia exported 1,416,084 tonnes of wheat and durum in October, down 5 per cent from 1,493,772t shipped in September, according to the Australian Bureau of Statistics.
• October saw the largest bulk durum cargo in some time to North Africa, 51,737 to Algeria, shipped from Geelong in Victoria.

International grain and oilseed tenders & trade

• Egypt's state grains buyer, the General Authority for Supply Commodities (GASC), said on Thursday it bought 420,000 metric tons of Russian wheat in an international tender. The purchase comprised 210,000 metric tons of Russian wheat for Jan. 10-20 shipment and 210,000 metric tons of wheat for Jan. 21-31, GASC said. Prices on FOB basis were all at $265/t, while freight cost mostly ranged at $21/t. The seller was Grain Flower.
• Lebanon is believed to have purchased about 30.000 tonnes of milling wheat in a tender, expected to be sourced from Ukraine. Wheat with 11.5% protein content was purchased at a price of 253 USD/t C&F for spot shipment. Finance is being provided by the World Bank as part of its continuing program of wheat purchases to assist Lebanon.

Pending Tenders ...

• Algeria’s OAIC issued a tender to buy 50,000 tonnes or more milling wheat. Shipments February and March. Closing day is Dec. 12, 2023.
• Bangladesh’s state grains buyer issued two international tender to purchase 50,000 metric tons of milling wheat. The deadline for submission of price offers in the first tender is Dec. 12, for the second is Dec. 19.
• A government agency in Pakistan issued an international tender to purchase and import 110,000 metric tons of wheat. The deadline for submission of price offers is Dec. 27.

FAO - Food Price Index - Dec Update

The benchmark for world food commodity prices were broadly stable in November, with lower international cereal quotations offset by higher prices of vegetable oils, the Food and Agriculture Organization of the United Nations (FAO) reported Friday.

• The FAO Food Price Index, averaged 120.4 points in November, unchanged from its level in the previous month and 10.7 percent lower than in November 2022.
• The FAO Cereal Price Index decreased by 3.0 percent from October.
• The FAO All Rice Price Index remained stable month-on-month.
• The Vegetable Oil Price Index, meanwhile, increased by 3.4 percent from October.
• The FAO Dairy Price Index rose 2.2 percent from October.
• The FAO Sugar Price Index rose by 1.4 percent month on month, averaging in November as much as 41.1 percent higher than its level in the same month last year.
• The FAO Meat Price Index dipped 0.4 percent from October.

FAO - Supply & Demand - Dec Update

FAO raised its forecast for this season’s harvests in a new Cereal Supply and Demand Brief, also released Friday.

• World cereal production in 2023 is now pegged at 2 823 million tonnes, up 0.9 percent from the previous year and 10.3 million tonnes above the previous record high reached in 2021.
• The forecasts for maize production were trimmed for the European Union and Mexico.
• FAO expects global rice production in 2023/24 to rise by 0.8 percent from the previous marketing season.
• Looking ahead to the next season, planting of the 2024 winter wheat crop is ongoing in the northern hemisphere countries and, reflecting lower crop prices, area growth could be limited.
• Sowing of the 2024 coarse grain crops is ongoing in the southern hemisphere countries, with slower sowings in Brazil but a rebound in Argentina.
• World cereal total utilization in 2023/24 is forecast at 2.813 million tonnes, 1.1 percent higher than in 2022/23.
• World cereal stocks by the close of seasons in 2024 are predicted to rise by 2.7 percent above their opening level and mark a new record high.
• Based on the latest forecasts, the global cereal stock-to-use ratio would be 30.8 percent in 2023/24, indicating an overall comfortable supply level.
• World trade in cereals in 2023/24 is forecast to contract slightly to 468.4 million tonnes, down 1.8 percent from the 2022/23 level.

Outside markets ...

Energy markets

Oil prices rose more than 2% on Friday after U.S. data supported expectations of demand growth, but both benchmarks fell for a seventh straight week, their longest streak of weekly declines in half a decade, on lingering oversupply concerns. Like crude, U.S. RBOB gasoline futures on Friday rebounded about 3% from two-year lows on Thursday.

• Brent crude settled up 2.4%, while U.S. West Texas Intermediate crude gained 2.7%.
• For the week, both benchmarks lost 3.8%, after hitting their lowest since late June on Thursday.
• U.S. output remained near record highs of over 13 million barrels per day, U.S. Energy Information Administration data showed on Wednesday.
• U.S. gasoline demand a week earlier lagged the 10-year seasonal average by 2.5% and gasoline stocks rose by 5.4 million barrels to 223.6 million barrels, the EIA said, more than quintuple the 1 million barrel build that had been expected.
• In India, fuel consumption in November fell after touching a four-month peak the previous month.
• Fuelling the market's downturn, Chinese customs data showed that crude oil imports in November fell 9% from a year earlier, although exports grew in November for the first time in six months.
• However, Friday's gains, the first in six sessions, could be a sign that the market has found a floor for now.
• U.S. Labor Department data showed stronger-than-expected job growth.
• Offering more support to the demand enthusiasm, data showed U.S. consumer sentiment perked up much more than expected in December.
• Meanwhile, Saudi Arabia and Russia on Thursday called for all OPEC+ members to join an agreement on output cuts for the good of the global economy.

This morning, oil prices rose, extending gains for a second session.

• U.S. efforts to replenish strategic reserves provided some support, although concerns of crude oversupply and softer fuel demand growth next year persisted.
• The recent price weakness drew demand from the U.S., which has sought up to 3 million barrels of crude for the Strategic Petroleum Reserve (SPR) for delivery in March 2024.
• Despite the OPEC+, having pledged to cut 2.2 million barrels per day (bpd) of production in the first quarter, investors remain sceptical supply will drop.
• Output growth in non-OPEC countries is seen leading to excess supply next year.
• RBC Capital Markets expects stock draws of 700,000 bpd in the first half but only 140,000 bpd for the full year.
• With cuts not implemented until next month and country level production data to follow subsequent to January, it will be a volatile two months before there is preliminary clarity on quantifiable data on compliance, analysts said.
• This week, investors are watching for guidance on interest rate policies from meetings at five central banks, including the Federal Reserve, and data on U.S. inflation, for their impact on the global economy and oil demand.

Ocean freight markets

The Baltic Exchange's main sea freight index in London, snapped its four-week winning streak on Friday as rates declined across larger vessel segments.

• The overall index was down 0.5%, declining by about 22% for the week.
• The capesize index jumped 1.3%, but fell about 33% for the week.
• The panamax index lost 4.2% falling 6% during the week, the biggest weekly fall in a month.
• The supramax index was down 1.1%, but closed up about 3.3% for the week.

Equity markets

US stock indexes settled moderately higher, with the S&P 500 posting a 4-1/4 month high, the Dow Jones Industrials posting a 1-3/4 year high.

• Wall Street reached a 20-month high ahead of a week that includes essential U.S. inflation data and the Federal Reserve's final rate decision of the year.
• U.S. Nov nonfarm payrolls rose +199,000, stronger than expectations.
• The Nov unemployment rate fell -0.2 to a 4-month low of 3.7%, showing a stronger labor market than expectations.
• U.S. Nov average hourly earnings were +4.0% y/y, unchanged from Oct.
• The University of Michigan U.S. Dec consumer sentiment index rose +8.1 to a 4-month high of 69.4.
• The University of Michigan U.S. Dec 1-year inflation expectations eased to a 2-3/4 year low of 3.1%.
• Also, the Dec 5-10 year inflation expectations eased to 2.8%.
• The 10-year US T-note yield rose +8.5 bp to 4.235%.
• U.S. stocks also have a positive carryover from Friday’s rally in the Euro Stoxx 50 to a 16-year high.
• Japan's Q3 GDP was unexpectedly revised lower to -2.9% (y/y annualized), the steepest pace of contraction since the pandemic.
• The Q3 GDP deflator was revised upward to a record +5.3% y/y.
• Japan Oct labor cash earnings rose +1.5% y/y, stronger than expectations.
• The Nov eco watches survey outlook unexpectedly rose +1.0 to 49.3

• Thursday economic news had showed continuing claims in the USA fell more than expected, indicating that laid-off workers are finding jobs.
• U.S. weekly initial unemployment claims rose +1,000 to 220,000.
• Weekly continuing claims fell -64,000 to 1.861 million.
• U.S. Oct wholesale trade sales unexpectedly fell -1.3% m/m.
• U.S. Oct consumer credit rose +$5.134 billion.
• Chinese trade news was mixed as Nov exports rose +0.5% y/y, while Nov imports unexpectedly fell -0.6% y/y.
• German Oct industrial production unexpectedly fell -0.4% m/m.
• Eurozone Q3 employment was revised lower to +0.2% q/q and +1.3% y/y.
• The Japan Oct leading index CI fell -0.2 to 108.7.

For the week, the S&P 500 rose 0.21%, the sixth time in a row it has logged a weekly gain, its longest streak since November 2019.

The Dow edged up 0.01% for the week, also its sixth straight weekly gain, its longest run of positive weeks since February 2019.

The Nasdaq gained 0.69% for the week.

This morning Asian shares mostly gained.

• Hong Kong’s Hang Seng sank 0.8%, the Shanghai Composite added 0.7%, Tokyo’s Nikkei 225 index gained 1.5%, the Kospi in Seoul was 0.3% higher, Australia’s S&P/ASX 200 was virtually unchanged, India’s Sensex was 0.1% higher and Bangkok’s SET added 0.2%.

• In China, leaders agreed at an annual planning meeting last week to boost spending to accelerate their economy, though details of policy changes were not provided.
• Despite the Chinese economy expanding by around 5% this year, a slowdown is expected next year. Data released on Saturday showed China’s consumer prices in November experienced their steepest fall in three years, in another sigh of weakness.

Currency trading

The dollar index rose, posting a 3-week high.

• The dollar moved higher after stronger-than-expected U.S. economic reports on Nov payrolls and Dec consumer sentiment dampened speculation the Fed would begin cutting rates as soon as Q1.
• The dollar fell back from its best levels after stocks recovered early losses and moved higher, curbing liquidity demand for the dollar.
• The EUR/USD fell, posting a 3-1/2 week low, but losses were limited as swap markets priced lower the chances of the ECB cutting interest rates early next year.
• The USD/JPY rose, after the yen fell back moderately from Thursday’s 4-month high against the dollar.
• Friday’s Japanese economic news was mixed for the yen.

This morning, the U.S. dollar rose to 145.53 Japanese yen from 144.93 yen. The euro gained to $1.0768 from $1.0761.

Settlement prices for key commodity, index and currencies

• Chicago wheat March '24 contract was down 10.4c/bu to 631.6c/bu;
• Kansas wheat Mar contract was down 6.4c/bu to 661c/bu;
• Minneapolis wheat Mar contract was down 7.6c/bu to 729.4c/bu;
• MATIF wheat Mar contract, was down €1.75/t to €230.25/t;
• ASX wheat Jan '24, was up A$2/t to A$398/t;
• Black Sea wheat has not quoted since August 11, 2023;
• US DWI Cash (durum wheat index) was up 0.28c/bu to 909.19c/bu;
• 1CWAD (Canadian durum wheat) avg spot prices was down C$0.05/t to C$454.95/t;
• EDW (EU durum) Mar contract, was unchanged to €392/t;
• Chicago corn Mar was down 2.4c/bu to 485.4c/bu;
• MATIF corn Mar was down €0.5/t to €201.25/t;
• Chicago soybeans Jan down 7.6c/bu to 1304.0c/bu;
• Winnipeg canola Jan down C$6.6/t to C$660/t;
• MATIF rapeseed Feb contract, was up €2.5/t to €441.5/t;
• Brent crude Feb was up US$1.79 per barrel to $75.84;
• WTI crude Jan was up US$1.89 per barrel to $71.23;
• BADI (Baltic Dry Index) was down 12 points to 2.483;
• Dow Jones was up 130.49 points to 36.247,87;
• S&P 500 was up 18.78 points to 4.604,37;
• NASDAQ Composite up 63.98 points to 14.403,97;
• US dollar index (Mar '24) was up 0.484 points to 103.633;
• AUD/USD weaker at US$0.6573;
• USD/CAD weaker at $1.3577;
• EUR/USD weaker at $1.0759;
• USD/RUB weaker at ?92.1481.

That's all, thank you.

We wish you a nice day.

Author: Sandro F. Puglisi

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